An analysis of financial performance of listed companies in the Maldives / Aishath Shizna

Abstract

The purpose of this study was to analyse the financial performance of the publicly listed companies in the Maldives with a focus on identifying the profitability and liquidity of the companies. This study also analyses the debt burden of the companies and also to identify the earnings the investors of these companies can generate for the money invested by them.
Financial performance was evaluated for the six publicly listed companies who have traded on the Maldives Stock Exchange until 31 December 2015. In this research, financial performance was analysed with regard to profitability, liquidity. The data was used from the published annual reports of the companies and analysis was made for a five- year period from 2011 to 2015. A detailed analysis of the ratios was conducted and findings were discussed.
Profitability ratios of the companies were analysed to identify the profitability position of the companies. It was identified that profitability of the companies varied over the five-year period, with Dhiraagu Plc performing better than the other six companies in terms of profitability. Liquidity ratios were calculated to analyse if the companies are managing their working capital efficiently. It was identified that most of the companies were not that good in managing their working capital with efficiency and only Dhriaagu Plc and Amana Takaful Plc had healthy liquidity positions within the ideal range. Leverage ratios were used to analyse the debt burden of the companies. It was identified that only Dhiraagu Plc and Amana Takaful Plc had lower leverage than the ideal level. Operations of the other four companies were financed mostly through debt rather than equity as a result they have a huge debt burden. Investor ratios were calculated to analyse the return the investors could expect for the amount they invested in shares of the companies. It was identified that throughout the five- year period STO Plc has given a better return to the investors, while Dhiraagu Plc and BML Plc also gave a steady return on the investments.
Based on the analysis of the six companies conclusion was made as to which among the six companies was more attractive to potential investors in these companies and it was concluded that Dhiraagu Plc will be the most attractive based on their stable performance and the steady return they have giving to their investors.